Wednesday, July 11, 2007

With a growing demand for high-end wine and an ever-shrinking pool of available land in the Napa Valley and other premium locations, vineyard leasing is becoming an excellent alternative for small to medium-sized boutique wineries looking to avoid the large upfront capital expenditures involved in purchasing and maintaining their own land. While vineyard leasing does come with a number of financial perks – for example, lease payments are tax deductible – there are a host of legal complications such as maintenance, common areas, irrigation systems, and property access. A big concern for property owners and property with multiple lessees is to make sure the business practices of one don’t besmirch the reputations of the others.

One of the unique advantages of leasing land is the ability to grow your business by purchasing additional blocks of acreage from your existing land supplier. This allows a small to medium sized vintner to grow slowly and add capacity as needed in a just in time model, again without the large upfront costs of buying land out right. As the industry continues to grow, it will be options such as land leasing that will allow new entrants into the market and a greater stability to the entire field.

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